<PAGE>
U. S. Securities and Exchange Commission
Washington, D. C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarter ended June 30, 1998
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[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission File No. 33-9782-LA
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HORTITECH, INC.
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(Name of Small Business Issuer in its Charter)
UTAH 87-04444506
---- ----------
(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
Suite 210, 580 Hornby Street
Vancouver, British Columbia, Canada V6C 3B6
---------------------------
(Address of Principal Executive Offices)
Issuer's Telephone Number: (604)-687-6991
N/A
---
(Former Name or Former Address, if changed since last Report)
Check whether the Issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the Company was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
(1) Yes X No (2) Yes X No
--- --- --- ---
(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PAST FIVE YEARS)
Check whether the issuer has filed all documents and reports required to
be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by a court. Yes X No
--- ---
(APPLICABLE ONLY TO CORPORATE ISSUERS)
State the number of shares outstanding of each of the Issuer's
classes of common equity, as of the latest practicable date:
July 30, 1998
Common - 18,846,170 shares
DOCUMENTS INCORPORATED BY REFERENCE
A description of any "Documents Incorporated by Reference" is
contained in Item 6 of this Report.
Transitional Small Business Issuer Format Yes X No
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
The Financial Statements of the Company required to be filed with
this 10-QSB Quarterly Report were prepared by management and commence on the
following page, together with related Notes. In the opinion of management,
the Financial Statements fairly present the financial condition of the
Company.
<PAGE>
<TABLE>
HORTITECH, INC.
(A Development Stage Company)
Balance Sheets
<CAPTION>
ASSETS
June 30, December 31,
1998 1997
(Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash $ 23,058 $ 3,753
Prepaid expenses - 7,500
Total Current Assets 23,058 11,253
OTHER ASSETS
Note receivable (Note 4) 94,299 90,317
Total Other Assets 94,299 90,317
TOTAL ASSETS $ 117,357 $ 101,570
LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 25,484 $ 34,912
Accounts payable - related parties 75,938 40,762
Advances payable (Note 5) 65,000 65,000
Loan payable - related party (Note 6) 102,105 -
Total Current Liabilities 268,527 140,674
STOCKHOLDERS EQUITY (DEFICIT)
Common stock: $0.001 par value; authorized
200,000,000 shares; 18,846,170 shares
issued and outstanding 18,846 18,846
Additional paid-in capital 387,119 387,119
Deficit accumulated during the
development stage (557,135) (445,069)
Total Stockholders Equity (Deficit) (151,170) (39,104)
TOTAL STOCKHOLDERS EQUITY (DEFICIT) $ 117,357 $ 101,570
</TABLE>
<TABLE>
HORTITECH, INC.
(A Development Stage Company)
Statements of Operations
(Unaudited)
<CAPTION>
From
Inception on
For the For the October 24,
Three Months Ended Six Months Ended 1986 Through
June 30, June 30, June 30,
1998 1997 1998 1997 1998
<S> <C> <C> <C> <C> <C>
REVENUES $ - $ - $ - $ - $ -
EXPENSES - - - - -
INCOME (LOSS) FROM
DISCONTINUED OPERATIONS (18,299) (3,503) (112,066) (260) (557,135)
NET INCOME (LOSS) $ (18,299) $ (3,503)$(112,066) $ (260)$(557,135)
NET INCOME (LOSS)
PER SHARE $ (0.00) $ (0.00)$ (0.00) $(0.00)
WEIGHTED NUMBER OF
SHARES OUTSTANDING 18,846,170 18,846,170 18,846,170 18,846,170
</TABLE>
<TABLE>
HORTITECH, INC.
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)
<CAPTION>
Deficit
Accumulated
Additional During the
Common Stock Paid-in Development
Shares Amount Capital Stage
<S> <C> <C> <C> <C>
Balance, October 24, 1986 - $ - $ - $ -
Issue of common stock to
officers and directors at
$5.00 per share 1,000 1 4,999 -
Net loss for the year ended
December 31, 1986 - - - -
Balance, December 31, 1986 1,000 1 4,999 -
Issue of common stock to
public at $250 per share 600 1 149,999 -
Less stock offering cost - - (19,880) -
Issue of common stock in
exchange for subsidiary 270 - 500 -
Issue of common stock for
services rendered at
approximately
$5.00 per share 505 - 2,527 -
Issue of common stock in private
placement at approximately
$12.50 per share 6,045 6 75,557 -
Net loss for the year ended
December 31, 1987 - - - (176,716)
Balance, December 31, 1987 8,420 8 213,702 (176,716)
Net loss for the year ended
December 31, 1988 - - - (36,504)
Balance, December 31, 1988 8,420 8 213,702 (213,220)
Net loss for the year ended
December 31, 1989 - - - (490)
Balance, December 31, 1989 8,420 $ 8 $ 213,702 $ (213,710)
Contribution of capital - - 35 -
Net loss for the year ended
December 31, 1990 - - - (727)
Balance, December 31, 1990 8,420 8 213,737 (214,437)
Net loss for the year ended
December 31, 1991 - - - (224)
Balance, December 31, 1991 8,420 8 213,737 (214,661)
Net loss for the year ended
December 31, 1992 - - - (236)
Balance, December 31, 1992 8,420 8 213,737 (214,897)
Net loss for the year ended
December 31, 1993 - - - (235)
Balance, December 31, 1993 8,420 8 213,737 (215,132)
Common stock issued for cash
and services at approximately
$0.43 per share 14,134 14 5,986 -
Net loss for the year ended
December 31, 1994 - - - (9,162)
Balance, December 31, 1994 22,554 22 219,723 (224,294)
Common stock issued for cash
at $5.00 per share 2,000 2 9,998 -
Forgiveness of debt - - 4,759 -
Net loss for the year ended
December 31, 1995 - - - (6,019)
Balance, December 31, 1995 24,554 $ 24 $ 234,480 $ (230,313)
Common stock issued for cash
at $0.05 per share 360,000 360 17,640 -
Common stock issued for cash
at an average of $ 0.01
per share 18,461,600 18,461 135,000 -
Stock split adjustment 16 1 (1) -
Net loss for the year ended
December 31, 1996 - - - (25,839)
Balance, December 31, 1996 18,846,170 18,846 387,119 (256,152)
Net loss for the year ended
December 31, 1997 - - - (188,917)
Balance, December 31,1997 18,846,170 18,846 387,119 (445,069)
Net loss for the six
months ended June 30,
1998 (unaudited) - - - (112,066)
Balance, June 30, 1998
(unaudited) 18,846,170 $ 18,846 $ 387,119 $ (557,135)
</TABLE>
<TABLE>
HORTITECH, INC.
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
<CAPTION>
From
Inception on
For the For the October 24,
Three Months Ended Six Months Ended 1986 Through
June 30, June 30, June 30,
1998 1997 1998 1997 1998
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES
Income (loss) from
operations $ (18,299) $(3,503) $(112,066) $ (260) $ (557,135)
Adjustments to reconcile
net (loss) to net cash
provided by operating
activities:
Forgiveness of debt - - - - 4,759
Stock issued for services - - - - 1,000
Increase in accounts
payable-related parties 3,666 - 35,176 - 75,938
Amortization of discount
on note payable - (3,286) (3,982) (6,529) (20,212)
Changes in operating
assets and liabilities:
Increase in advances payable - - - - 65,000
(Increase) decrease in
refundable deposits 15,000 - - - -
Increase in prepaid
expenses - - 7,500 - -
Increase (decrease) in
accounts payable 2,033 6,774 (9,428) 6,774 25,484
Net Cash Used by
Operating Activities 2,400 (15) (82,800) (15) (405,166)
CASH FLOWS FROM
INVESTING ACTIVITIES
(Increase) in note receivable - - - - (74,087)
Net Cash Used by Investing
Activities - - - - (74,087)
CASH FLOWS FROM
FINANCING ACTIVITIES
Cash received from loan (3,360) - 102,105 - 102,105
Cash contributed to
additional paid-in capital - - - - 243,607
Stock offering cost - - - - (19,880)
Issuance of common stock - - - - 176,479
Net Cash Used by Financing
Activities (3,360) - 102,105 - 502,311
Increase (Decrease) in Cash (960) (15) 19,305 (15) 23,058
CASH AT BEGINNING OF PERIOD 24,018 504 3,753 504 -
CASH AT END OF PERIOD $23,058 $ 489 $ 23,058 $ 489 $ 23,058
SUPPLEMENTAL CASH FLOWS
INFORMATION:
Interest $ - $ - $ - $ - $ -
Taxes $ - $ - $ - $ - $ -
NON CASH FINANCING ACTIVITIES:
Stock issued for services$ - $ - $ - $ - $ 1,000
</TABLE>
HORTITECH, INC.
(A Development Stage Company)
June 30, 1998 and December 31, 1997
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Organization
The financial statements presented are those of Hortitech, Inc. (a
development stage company). The Company was incorporated under the laws of
the State of Utah on October 24, 1986. The Company completed a public
offering of its common stock in November 1987. The gross proceeds received by
the Company were $150,000. On August 31, 1987, the Company completed the
acquisition of all the outstanding common shares of Western Antenna Research,
Inc., a Colorado corporation. The Company's name was subsequently changed to
Western Antenna Corporation. After two years of unsuccessful operations, the
name of the Company was changed to Hortitech, Inc. on November 29, 1989. The
Company was incorporated for the purpose of providing a vehicle which could be
used to raise capital and seek business opportunities believed to hold a
potential for profit.
b. Accounting Method
The Company s financial statements are prepared using the accrual
method of accounting. The Company has adopted a calendar year end.
c. Cash Equivalents
The Company considers all highly liquid investments with a maturity
of three months or less when purchased to be cash equivalents.
d. Provision for Taxes
At June 30, 1998, the Company has net operating loss carryforwards
of approximately $557,000 that may be offset against future taxable income
through 2013. No tax benefit has been reported in the financial statements,
because the Company believes there is a 50% or greater chance the carryforward
will expire unused. Accordingly, the potential tax benefits of the loss
carryforward have been offset by a valuation allowance of the same amount.
e. Estimates
The preparation of financial statements in conformity with Generally
Accepted Accounting Principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the Financial
Statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
f. Fair Value of Receivables
The Company's note receivable is discounted at 8% per annum to
approximate its estimated fair value.
g. Unaudited Financial Statements
The accompanying unaudited financial statements include all of the
adjustments which, in the opinion of management, are necessary for a fair
presentation. such adjustments are of a normal, recurring nature.
h. Significant Accounting Policies
Additional accounting policies will be determined when principal
operations begin.
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using the generally
accepted accounting principles applicable to a going concern which
contemplates the realization of assets and liquidation of liabilities in the
normal course of business. However, the Company has no current source of
revenue. Without realization of additional capital, it would be unlikely for
the Company to continue as a going concern. It is management's plan to seek
additional capital through a merger with an existing operating company. In
the interim, shareholders of the Company have committed to meeting its minimal
operating expenses.
NOTE 3 - COMMON STOCK
On July 5, 1996, the Company issued 360,000 shares of common stock
for cash at approximately $0.05 per share.
On July 8, 1996, the Board of Directors approved a 1 for 50 reverse
stock split. The reverse stock split is reflected in these financial
statements on a retroactive basis. The Company then issued 18,461,600 shares
of post split common stock for gross proceeds of $153,461.
NOTE 4 - NOTE RECEIVABLE
The Company loaned $164,299 to an individual in 1996. The note is
discounted at 8% per annum and is due on May 20, 1998. The Company holds
100,000 shares of The Beverage Store, Inc. restricted common stock as
collateral. On August 12, 1997, the Company received $70,000 as a partial
payment. The balance at December 31, 1997 was $90,317.
NOTE 5 - ADVANCES PAYABLE
The Company was advanced $1,015,000 to aid in the acquisition of The
Indian Motorcycle Trademark. The acquisition did not take place, and the
Company returned $950,000 to the lender. There is a balance of $65,000 which
the Company still owes. The advance is non-interest bearing, and is due on
demand.
NOTE 6 - LOAN PAYABLE - RELATED PARTY
In 1998, the Company received a non-interest bearing loan from
related parties in the amount of $105,465 of which $3,360 has been repaid.
Item 2. Management's Discussion and Analysis or Plan of Operation.
Plan of Operation.
- ------------------
The Company has not engaged in any material operations or
had any revenues from operations during the last two calendar years. The
Company's plan of operation for the next 12 months is to continue to seek the
acquisition of assets, properties or businesses that may benefit the Company
and its stockholders. Management anticipates that to achieve any such
acquisition, the Company will issue shares of its common stock as
the sole consideration for any such acquisition.
During the next 12 months, the Company's only foreseeable
cash requirements will relate to maintaining the Company in good
standing or the payment of expenses associated with reviewing or
investigating any potential business ventures. Such funds may
be advanced by management or stockholders as loans to the Company. Because
the Company has not identified any such ventures as of the date of this
Report, it is impossible to predict the amount of any such loans or advances.
However, any such loans or advances should not exceed $25,000 and will be on
terms no less favorable to the Company than would be available from a
commercial lender in an arm's length transaction. As of the date of this
Report, the Company is not involved in any negotiations respecting any such
ventures.
Results of Operations.
- ----------------------
Other than maintaining its good corporate standing in the State of Utah,
compromising and seeking the acquisition of assets, properties or businesses
that may benefit the Company and its stockholders, the Company has had no
material business operations during the two most recent calendar years.
During the quarters ended June 30, 1998 and 1997, the Company had no
business operations, but recorded net loss from discontinued operations of
$18,299 during the quarterly period ended June 30, 1998, compared with net
loss of $3,503 from discontinued operations during the quarter ended June 30,
1997.
Liquidity.
- ----------
The Company had cash on hand of $23,058 and $489, respectively, at June
30, 1998, and 1997. During the quarter ended March 31, 1998, a related party
made a non-interest bearing loan to the Company in the amount of $105,465;
$3,360 had been repaid as of June 30, 1998.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None; not applicable.
Item 2. Changes in Securities.
None; not applicable.
Item 3. Defaults Upon Senior Securities.
None; not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted to a vote of the Company's security holders
during the quarterly period covered by this Report.
Item 5. Other Information.
None; not applicable.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
Financial Data Schedule.
(b) Reports on Form 8-K.
None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this Report to be signed on its behalf by
the undersigned thereunto duly authorized.
HORTITECH, INC.
Date: Aug 4/98 By/s/Suzanne L. Wood
-------------- --------------------------------------
Suzanne L. Wood, President
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, this Report has been signed below by the following persons on
behalf of the Company and in the capacities and on the dates indicated:
HORTITECH, INC.
Date: Aug 4/98 By/s/Suzanne L. Wood
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Suzanne L. Wood, President and
Director
Date: Aug 11/98 By/s/Barry D. Russell
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Barry D. Russell, Director,
Treasurer and Secretary
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 23058
<SECURITIES> 0
<RECEIVABLES> 94299
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 23058
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 117357
<CURRENT-LIABILITIES> 268527
<BONDS> 0
0
0
<COMMON> 18846
<OTHER-SE> (170016)
<TOTAL-LIABILITY-AND-EQUITY> 117357
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (112066)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> (112066)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (112066)
<EPS-PRIMARY> (0.00)
<EPS-DILUTED> (0.00)
</TABLE>
